ECON252_Practice_Exam_1A_-_Chapters_1_2_4-8_KEY_

Iftheyproduceacarthisyearbutitdoesntget

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Unformatted text preview: g faster than nominal GDP. B. real GDP is growing slower than nominal GDP. *** C. real GDP is growing at the same rate as nominal GDP. D. [There is no way to tell] [Use the following information to answer questions 20–21.] Jimmy earns $1,000 a week as an accountant at ABC Tax Services. He uses $80 to purchase food for his Super Bowl party at Subway. Rachel earns $400 a week working at Subway. She spends $50 to have her taxes done at ABC Tax Services. 20. Which events occur in the markets for factors of production? A. Rachel earns $400 per week and spends $50 on tax services. B. Jimmy earns $1,000 per weekand Rachel earns $400 per week. *** C. Jimmy earns $1,000 per week and spends $80 on food. D. Jimmy spends $80 on food and Rachel spends $50 on tax services. 21. Rachel’s labor at Subway represents A. a flow of goods/services from firms to households. B. a flow of money from firms to households. C. a flow of money from households to firms. D. a flow of inputs from households to firms. *** 22. Subaru has a plant in Lafayette, Indiana. If they produce a car this year but it doesn’t get sold, is that counted toward US GDP this year? A. Yes, it counts as Consumption. B. Yes, it counts as Investment. *** C. No, because Subaru is not a US company. D. Yes, it counts as imports. 23. Which of the following is included in GDP? A. medical marijuana purchased from a government‐run pharmacy by a glaucoma patient *** B. recreational marijuana purchased from a drug dealer by a college student C. recreational marijuana produced and consumed by a man in his attic D. [All of the above are include in GDP] [Use the following information to answer questions 24–25.] The country of Caspir produces only cereal and milk. Quantities and prices of these goods for the last several years are shown below. The base year is 2008. Year Price of Quantity of Price of Milk Quantity of Cereal Cereal Milk 2008 $4.00 90 $1.50 150 2009 $4.00 100 $2.00 180 2010 $5.00 120 $2.50 200 2011 $6.00 150 $3.50 200 24. In 2009...
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